OTTAWA — Infrastructure spending in the three northern territories was lower over the last two years than it would have been in the absence of the federal government’s $188-billion infrastructure program, according to another new report that raises doubt over the success of one of Prime Minister Justin Trudeau’s signature undertakings.

The Parliamentary Budget Officer found that the Northwest Territories, Yukon and Nunavut collectively lowered their infrastructure spending levels by $111 million in 2016-17 and 2017-18, compared to what their spending plans were before the Liberal plan was introduced. The results mirror an earlier report from the PBO that showed infrastructure spending levels in the provinces had also fallen below earlier estimates.

That lower spending in the provinces and territories contradicts a central assumption in Trudeau’s infrastructure program, which was partly rooted in the notion that higher spending at the federal level would incentivize lower orders of government to likewise allocate more money toward infrastructure. Instead, that spending appears to have been absorbed by the provinces and territories and funnelled into other budget items, like healthcare or education, for example.

“Consistent with our findings for provinces, we estimate that not only territories did not spend according to their plans prior to the introduction of the IICP (Investing in Canada Plan), some of them have also revised their planned capital spending downwards,” the report said, referencing the Northwest Territories and Nunavut.

The prime minister first unveiled the $188-billion spending program as part of a campaign promise in 2015. The program aims to dole out the cash over a roughly 12-year period, reinvigorating aging roads, bridges and light rail systems, as well as boosting funding for clean technologies and telecommunications lines, among other things.

The program had a slow start soon after being offi cially introduced in the 2016 budget. Federal spending on the first phase of the program, roughly $14.4 billion over 18 months, was slow to make its way into actual projects, due in part to reporting gaps and a failure by provinces to submit their receipts to Ottawa, according to officials at the Infrastructure ministry.

In its most recent budget, Ottawa added $2.2 billion over one year to its so-called Gas Tax Fund, which takes a portion of sales from gasoline and diesel across Canada and gives it directly to municipalities for infrastructure spending. The move was widely seen as an acknowledgement by the federal government that its spending has failed to reach the municipal level within its planned timelines. It was also seen as a way to skirt around the provinces in getting funding to cities and towns.

Still, infrastructure spending in both the provinces and territories is on the rise, despite being lower than previous estimates.

In mid March, the PBO released a report on provincial infrastructure spending, and found that it was a total of $3.8 billion below what it would have been in the absence of the federal infrastructure plan.

Spending under the program has gradually begun to make its way out the door over the past three years. Ottawa has now spent just under $20 billion on roughly 4,700 projects across Canada, from water treatment facilities to massive light rail expansions.

However, the economic benefits of the plan remain uncertain. An August 2018 report by the PBO found that Ottawa’s infrastructure plan boosted Canadian GDP by between 0.13 and 0.16 per cent, well below the 0.4 per cent growth the government had projected in its 2016 budget.

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